Bankia’s First EU Bailout Funds Expected in Days, Latorre Says

By Angeline Benoit and Emma Ross-Thomas -
Jul 27, 2012

Bankia (BKIA) group, the largest lender
nationalized by Spain, will receive its first rescue aid under
the nation’s European bank bailout in the “coming days,”
Deputy Economy Minister Fernando Jimenez Latorre said.

The European Commission and the Bank of Spain are assessing
lenders’ needs and it’s “foreseeable that for Bankia in the
coming days there will be a significant capital injection,” he
told reporters in Madrid today.

Spain sought a European rescue of as much as 100 billion
euros ($123 billion) for its banks last month, and the final
amount will be determined after a stress test in September. The
European Financial Stability Facility will fund a first tranche
of 30 billion euros and keep it in reserve for unexpected needs,
according to terms of the agreement.

Economy Minister Luis de Guindos has said that the four
banks already under state control, of which Bankia group is the
biggest, will be recapitalized first, as the largest capital
needs are concentrated in those lenders.